There is quite a bit to consider when it comes to running a business. There’s inventory, hiring and firing, marketing and on and on. Some of these things you can automated to an extent. Others you can outsource. And thank goodness for that. Nobody gets into running a business of their own, becoming an entrepreneur, because they really love going over spreadsheets and haggling with distributors over pricing. People get into business because they have an idea, because they see an opening in the marketplace, because they have insight and innovation to bring to an industry.
Unfortunately, while that is the heart of a successful business, it’s only about ten percent of the actual day to day work of operating your own business. The day to day work is all that other stuff. It’s writing checks and signing invoices and insuring your company cars and on and on.
So when you’re outsourcing, you’re really looking for someone who is going to shoulder the burden of a task so that it’s not your problem anymore. Now and then they might need to call you up to make a decision. Maybe they’ll send you updates from time to time. But they’re doing most of the headache-inducing day to day labor of it. In short, they’re making it their problem, not yours.
So this is the main thing you’re looking for whether you’re talking about marketing services, suppliers, store managers, anyone who’s working on your behalf. If you really want to buckle down and work eighteen hour days seven days a week, you probably could manage to do every single task yourself. But if you can’t delineate, if you don’t know how to hire competent help, then you’re not really running a business, you’re just self employed and working way too hard.
There’s an upside and a downside to being categorized as a high-risk merchant. The fact that you don’t have as many options for payment processors is disappointing and frustrating for some, but on the other hand, that’s a pain-in-the-neck decision to make, and at least it just got narrowed down for you.
Best High Risk Merchant Account: Is That You…?
So you’ve been categorized as a high risk merchant and your old payment processor doesn’t want to work with you anymore, or maybe they’re willing to, but charging you an arm and a leg. You can’t exactly blame them seeing as they signed on with you at a lower risk level, and now they just saw a big spike in what it might cost them to do business with you. Or maybe you were always a high-risk merchant and you’re just looking for someone to cover payment processing for you. In any event, the bottom line is that you’re looking for a processor that offers merchant accounts to high-risk merchants.
Here’s something to consider: You might not be high-risk. Every payment processing service has their own criteria for what makes a high-risk merchant. You may find that while your previous processor puts you on the high-risk side of the line, their nearest competitor does not. Processors will consider different businesses high-risk or low-risk for different reasons.
So before you start looking for a high-risk merchant payment processing service, it might not be a bad idea to shop around with some other brands outside of that niche, first. That being said, if you’re hovering around that gray area between high and low risk, it might be better to look at people who specialize in high risk anyways so that you have a little more breathing room in how you do business.
Can You Go Back To Being Low-Risk?
If you think you might like to try and turn back the clock and stick with your prior account, that may or may not be possible depending on a number of factors.
The first question is: Why are you classified as a high-risk merchant? Does it have to do with how you do business, or does it have to do with the industry that you are in?
In either case it may be possible to correct the issue, though in the case of the latter, it depends on whether what you’re selling is the core of your business. It might be no big deal for a video game arcade to stop selling beer in order to be classified as low risk, but if you’re a bankruptcy attorney then you can’t exactly pivot to magazine and book
sales in order to have a broader range of merchant account providers to choose from. Correcting certain business practices can sometimes be more work, but it is also more manageable as an option for almost any type of business.
The main question you need to consider is why you’re getting hit with so many chargebacks. It usually comes down to one of a few things. Sometimes it’s just your industry. For online gaming, for instance, people often experience buyer’s remorse and file a chargeback. Other times it has to do with your refund policy.
Do you have information hidden away where customers can’t find it?
Or is it streamlined and easy to navigate on your website?
Nobody likes having to pay a refund, but by making the refund process simple you can keep a loyal customer and avoid chargebacks.
Finally, are you just taking chargebacks lying down? If you dispute every chargeback and make follow up calls with the banks and credit card companies in question, you have a good chance of being less of a risky proposition for merchant account provider
Of course, at the end of the day, there might not always be something that you can do about it. It could be that you’re just a high-risk merchant and that’s all there is to it. It’s still possible to get a fair deal on your merchant account, nevertheless.
Is This A Shady Business?
High-risk merchant account providers, are they a shady industry?
Here’s the thing: In any field where a lot of customers are desperate, you’re going to have some predatory companies out there. In case you haven’t guessed yet, industries where you have a lot of desperate customers describes almost every industry. Some more than others, sure, but there are fly-by-nighters in everything from electronics to restaurants to legal firms.
So yes, there are some people in the merchant account provider industry that are looking to lock you into an unfair contract or otherwise just not play fair. But that hardly describes the whole of the industry.
If you work in a high-risk merchant industry like gaming, tobacco or e-Cigarettes, then you know that the stigma attached to an industry isn’t always fair. If one in every ten businesses is running a not quite on the level operation, it reflects poorly on the industry as a whole. It doesn’t mean that everyone is responsible, it’s just that people tend to pay a lot more attention to bad news. A shop treating its customers with respect and paying all of its bills on time isn’t much of a headline-grabber for the same reason papers don’t report on every single airplane that lands safely at its destination.
What To Look For In A High-Risk Merchant Account Provider
But, there are shady providers out there. So that leaves us with the question of how you tell the good from the bad, how you identify a merchant account provider that has your best interests in mind and everything that you need in order to run a successful business. “Best” varies from one business to the next. A head/glassware shop has different needs than an airline or travel agency. But there are certain things most businesses are looking for in a merchant account provider.
- Positive reviews (or at least not a ton of negative reviews). Not every provider is going to be listed with the BBB, but it shouldn’t be hard to find some users online who will tell you about them. A handful of negative reviews comes with the territory of running any kind of business. But if the bad reviews are outweighing the good reviews, if the only information you can find on a company is negative, then it’s probably not a bad idea to cross them off of the list.
- Look at their terms and conditions. If you have to pay outrageous early termination fees or anything like that, then that’s usually a bad sign. A reputable service will keep you on the hook with great service and fair pricing. They don’t need to slam the door shut and lock it behind you as soon as they have you in the building, so to speak.
- 24/7 service. The thing about running a business is that you’re going to have to deal with financial emergencies, and these financial emergencies get more expensive every passing minute they go unaddressed. That means that if you need to call for an advance or to correct an error at three in the morning, someone should be there to pick up the phone.
- They need to cover your industry, of course. Not every high-risk merchant account provider covers every high-risk industry. Some won’t touch alcohol or adult entertainment, for example. Whatever your industry, make sure to find out whether or not an account provider even covers that field before wasting your time filling out an application to do business with that provider.
- Transparency. Emails are fine and all, but if you really want to get a feel for any company you’re doing business with, not just merchant account providers, talk to them on the phone. Have a list of questions at the ready and gauge not only the answers, but how they respond to them. If they’re dodgy, if they take forever to answer the simplest question, that’s a bad sign. Clarity and transparency are a sign of a business with nothing to hide.
This is all very important when looking for a payment processor for your high-risk merchant account. But all of the other features you’re looking for apply, too. If they provide POS software and terminals and so on, then you want their apps and equipment to be accessible and user-friendly. Customizing the program should be easy, and the equipment shouldn’t be difficult to operate, install, or train new hires on. They should be offering whatever additional features and services you’re looking for, be it consultation, marketing, Quickbooks integration. It comes down to what kind of help you’re looking for with your payment processing service.
When you sign up for a merchant account, you’re not just paying someone to perform a service for you, you’re shaking hands with a partner in managing your business. You’re the one handling everything in-store, sure, but they’re the one counting the money, so trust is a very important pillar to that relationship.